Stripper says for-profit college degree ‘worthless’

Fort Lauderdale
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After enrolling at the Art Institute of Fort Lauderdale and spending $70,000 on her education, a graduate has turned to stripping, noting “there’s something wrong” with the way for-profit colleges are conducting business.

A college graduate from the Art Institute of Fort Lauderdale - a for-profit college owned in part by Goldman Sachs - unable to find gainful employment in her chosen field of video game design, has turned to stripping and now makes between $400 and $1,000 per week.

Carrianne Howard, a stripper at the Lido Cabaret in Cocoa Beach, Florida, has shed more than clothing as she brings to light the deceptions apparently running rampant in the for-profit college industry. Her recent actions have helped force attention on a new government report entailing rampant fraud in the for-profit college industry.

According to Bloomberg Business Weekly, the for-profit college industry receives more than $26 billion in federal aid each year. Some of these colleges charge six figures for degrees in low-paying fields such as design and cooking, leaving students strapped with huge college loans once they attempt to enter the work force.

In the Bloomberg report, Ms. Howard states: “Until you actually sit in the classes and you see it for yourself and you see the instructors teaching do you really notice that there is a difference, that there’s something wrong.”

After graduating in December 2007 and spending $70,000 of her parents’ money on her college degree, Ms. Howard worked briefly as a recruiter for video game companies. She lost her job in March 2009 at GameRecruiter, based in Fort Lauderdale.

GameRecruiter is an employment agency in the gaming industry that, according to its website, is “the premier search firm in the game industry,” specializing in “unique, unadvertised career opportunities to its extensive candidate network.”

Marc Mencher, president and CEO of GameRecruiter says she was let go because her entire department was shut down. Ms. Howard was making $12 an hour. She became a stripper after her position was eliminated.

In the Bloomberg story, Howard said: “I didn’t know what else to do,” she says. “I’ve got a worthless degree. It’s like I didn’t attend school at all.”

Mencher notes her struggles may be due in part to inadequate preparation on the part of the Art Institute’s gaming department.

“It’s a weak program because it’s understaffed,” says Mencher. “I personally feel the students aren’t getting their money’s worth.” He serves on the Art Institute’s national advisory board for gaming programs.

Goldman Sachs, owns 38 percent of the Art Institute’s parent company, Education Management Corp. (EDMC), and entered the for-profit college industry because of its rapid growth and skyrocketing stock prices. Government loans and grants as well as a rapidly increasing student enrollment all combined in making for-profit colleges a solid investment, until recently.

Goldman Sachs, along with two other firms, bought EDMC in 2006, taking it public in 2009. During that time they shared at least $70 million in “advisory, management and other fees,” the Bloomberg story notes.

EDMC is the second-largest US chain of for-profit colleges and has 136,000 students, more than three times the number at the University of Michigan. It has seen annual revenue double during the last five years to $2.4 billion.

Goldman Sachs, who recently agreed to pay $550 million in civil-fraud charges related to the US’s subprime mortgage fiasco, is EDMC’s largest stockholder. At it’s peak in April, Goldman’s EDMC shares were worth $1.39 billion. They have since fallen by 49 percent and are now worth around $708 million.

EDMC currently receives more than 80 percent of its revenue from US government financial aid programs.

A Huffington Post report notes for-profit colleges, while serving only six percent of the student population, receive 20 percent of the country’s Pell Grant revenue.

The tests were conducted by GAO agents posing as college applicants. They found that four of the colleges “encouraged fraudulent practices” while all 15 “made deceptive or otherwise questionable statements” to the undercover applicants.

Additionally, some college reps exaggerated potential salary after graduation, and failed to provide defined information on duration of college programs, costs, or graduation rates, as required by federal regulations.

In one instance, according to the GAO report a small beauty college told an undercover applicant that “barbers can earn $150,000 to $250,000 a year. While this may be true in exceptional circumstances, the Bureau of Labor Statistics (BLS) reports that 90 percent of barbers make less than $43,000 a year.”

The report listed an example where GAO’s applicants were told by college staff members they would attend classes for 12 months a year while stating the annual cost classes for nine months, misleading applicants over total tuition costs.

Other deceptive practices included pressuring applicants to sign enrollment contracts before being allowed to speak with financial advisers regarding financing options and program costs.

Ms. Howard owns the anti-Art Institute site Sueainow. It consists of a group of dissatisfied college students "that have been violated by post-secondary education" with the goal of collecting enough signatures on its petition for sending to the US Education Department. It currently has more than 70 signatures in place.

She has released several videos on YouTube in which she is seen authenticating herself after disparaging comments were posted in several online sites.